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MILKER’S MESSAGE www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — SEPTEMBER 3/SEPTEMBER 10, 2021
July cheese exports up 26.8 percent over June This column was written for the marketing week ending Sept. 3. It was a week of Covid cases shooting higher across the country. Hurricane Ida attacked the Louisiana coast — plunging New Orleans into darkness News and information for Minnesota and Northern Iowa dairy producers and causing flooding in Mississippi, even reaching to New York and New MIELKE MARKET Jersey with rains and flooding. And, it Alfalfa hay averaged $201 per ton, up $2 from Louisiana. Power outages may keep them WEEKLY was the United States, in humiliating June and $29 above a year ago. at idled for some time. surrender, leaving Afghanistan after 20 n Dairy exports are one of the key drivers By Lee Mielke years. With all that on our minds, I behind a record-high forecast for overall Looking at the cow side of the ledger, the July cull endeavor to report the dairy markets. U.S. agricultural exports in USDA’s latest Outlook price for beef and dairy combined averaged $75.60 First, the U.S. Department of Agriculture for U.S. Agricultural Trade report, according to the per cwt. This is up $1.70 from June, $5.10 above announced the August Federal order Class III Aug. 31 Daily Dairy Report. July 2020, and $4.00 above the 2011 base average of benchmark milk price at $15.95 per hundredweight. $71.60 per cwt. “The agency increased anticipated agricultural This is down 54 cents from July, $3.82 below August exports for fiscal year 2021 (ending Sept. 30) by $9.5 Meanwhile, the USDA’s latest Crop Progress 2020, and the lowest Class III since February. The billion to $173.5 billion,” the Daily Dairy Report report shows 60 percent of U.S. corn was rated good eight month Class III average stands at $16.78, stated, “while lifting fiscal year 2022 exports by $4 to excellent, as of the week ending Aug. 29, down from $17.61 a year ago and compares to billion to a record-large $177.5.” unchanged from the previous week, but 2 percent $15.83 in 2019. below a year ago. Fifty-six percent of the soybeans “Stronger exports of milk powders and cheese to Late morning on Sept. 3, Class III futures had the Mexico and Asia motivated USDA to increase its had a good to excellent rating, also unchanged from September contract at $16.61 per cwt.; October, the previous week but 10 percent below a year ago. expectations for dairy exports in fiscal years 2021 $16.84; November, $17.07; and December at $17.40 and 2022 to $7.3 billion and $7.5 billion, respectiveIn the week ending Aug. 21, 59,000 dairy cows per cwt. ly,” according to the Daily Dairy Report, aided by were sent to slaughter, down 1,100 from the previThe August Class IV price is $15.92 per cwt., internationally competitive prices and a weak U.S. ous week, but 4,400 or 8.1 percent above that week down 8 cents from July but $3.39 above a year ago, dollar. a year ago. StoneX says dairy cow slaughter is curand the lowest since April. Its average for the year rently tracking above the three-year average. n stands at $15.12, up from $13.62 a year ago, and n Those exports numbers are great, but don’t appear compares to $16.19 in 2019. to be transferring into more profitability on the Global milk prices continue to show a competitive n farm. A continued falling All Milk price and higher advantage for U.S. processors, according to StoneX U.S. dairy exports continue to impress, according corn and hay prices in July were not offset by the Sept. 1 “Early Morning Update.” to HighGround Dairy’s Lucas Fuess. Reporting in drop in the soybean price and resulted in the U.S. “Ideally, this should continue to translate to export the Sept. 6 “Dairy Radio Now” broadcast, Fuess said milk feed ratio falling again, a descent that started July cheese exports, at 81.1 million pounds, were up in December, paused in April, but has resumed ever opportunities assuming logistics issues don’t continue to impact the market too much. U.S. milk produc26.8 percent from July 2020. The increase was driv- since. The USDA’s latest Ag Prices report has the en primarily by gains into Mexico, but also impresJuly ratio at 1.55, down from 1.60 in June, and com- tion growth has been slowing as has milk output in the EU. Feed costs continue to be an issue so we sive exports to Japan. pares to 2.72 in July 2020. expect milk production should be relatively conNonfat dry milk exports, at 160.9 million, were The index is based on the current milk price in strained for the remainder of 2021.” down 3.1 percent, Fuess said, but still on track for relationship to feed prices for a ration consisting of The latest Margin Watch from Chicago-based another record year-over-year increase, up 12.7 per- 51 percent corn, 8 percent soybeans and 41 percent cent. He emphasized the large increase of nonfat alfalfa hay. In other words, one pound of milk would Commodity and Ingredient Hedging LLC. Says, “Dairy margins were unchanged over the first half dry milk to China — which is buying it wherever it only purchase 1.55 pounds of dairy feed of that of August as increases in both milk prices and feed can in recent months. U.S. powder shipments were blend. costs were largely offsetting since the end of July.” the highest since March of 2014. The U.S. All Milk price averaged $17.90 per cwt., It credited strength in cash cheese prices the past Dry whey totaled 37.3 million pounds, down 8.7 down 50 cents from June and $2.70 below the July week being supportive of Chicago Mercantile percent, though year-to-date is up 19.1 percent. 2020 average. Exchange Class III futures but warned, “The overall U.S. butter volumes were good as well, though a California’s All Milk price fell to $18.20 per cwt., tone of the market remains bearish with spot fraction of the others, Fuess said. Butter totaled 8 also down 50 cents from June and $2.90 below a futures still down around $2.50 from their May million pounds, up 80 percent from a year ago, with year ago. Wisconsin, at $17.70, was down 60 cents highs.” year-to-date exports up an impressive 136.1 percent. from June and $4.60 below a year ago. “Milk production remains strong for this time of Interestingly, the United States imported 8.6 milThe national average corn price hit $6.12 per the year as demand uncertainty lingers from the lion pounds, up 11 percent from a year ago, and bushel, up 12 cents per bushel from June, and a advancing Delta variant of Covid-19 and indications cheese imports totaled 37.5 million pounds, up 33.3 whopping $2.91 per bushel above July 2020. from Open Table that U.S. restaurants are no longer percent. showing growth in demand, with some significant Soybeans averaged $14.10 per bushel, down 40 Fuess also reported that Hurricane Ida impacted slowing evident in states more heavily impacted by cents from June after falling 30 cents the previous feed prices after damaging grain export elevators in month, but were still $5.60 per bushel above July See MIELKE, pg. 9 2020.
